12-21-2011 Council Agenda - Laserfiche WebLink

Home Browse Search

Adopting Fund Balance Policy (Exhibit C) GASB 54 separates fund balance into five new categories. Under the old standards there were three categories: Reserved, Designated, and Undesignated. The new categories are more descriptive, and focus on how the city plans to use its resources. A brief description of each of the new categories is listed below along with examples of each. Nonspendable Fund Balance - amounts that are not in a spendable form or are required to be maintained intact. An example of nonspendable fund balance is property held for resale. Property held for resale cannot be spent without being converted to cash first. Restricted Fund Balance - amounts subject to externally enforceable legal restrictions. An example of restricted fund balance is 10% Gambling proceeds required to be spent for lawful purposes under MS 349.12. Committed Fund Balance - amounts that can be used only for the specific purposes determined by a formal action of the government's highest level of decision - making authority. (City Council). Commitments may be changed or lifted only by the government taking the same formal action that imposed the constraint originally. An example of committed fund balance would be the City Council committing cable franchise fees for cable TV programming. Assigned Fund Balance - amounts a government intends to use for a specific purpose; intent can be expressed by the government body or by an official or body to which the governing body delegates the authority (City Administrator and /or Finance Director), An example of assigned fund balance would be the City's portion of a construction project where other funding was received with the requirement of a match. Unassigned Fund Balance - residual amounts that are available for any purpose in the General Fund. This category can only be found in the General Fund, as by being in any other fund, the City has stated its intent to use it for the purpose of that fund. The Fund Balance Policy attached incorporates these definitions. Additionally, the General Fund Policy establishes the Reserve Policy goal as discussed by the Council in its 11/9/11 meeting. At that time an analysis of General Fund revenue sources was reviewed. (See Exhibit D) This analysis concluded that the General Fund revenues were made up of 77% of stable revenues. The remaining 23% of revenues are subject to economic impacts and State policy discussion. (See Exhibit D) The General Fund Cash 2